For some reason, wealth is conflated with morality in America. The more money you have, the more moral and righteous you appear. So it's not surprising that people who mismanage money or incur so much debt they have to file bankruptcy are often stigmatized and shamed, which can cause others to avoid taking advantage of this beneficial legal process. However, here are two reasons why you shouldn't give into this kind of thinking that may prevent you from getting the help you need to gain control of your finances.
Bad Money Management Doesn't Equal Bad Morals
One reason many people feel guilty about filing for bankruptcy is they think they are immoral for getting into financial trouble. Part of this is because when you borrowed the money from the lender, you promised to pay it back, and being unable to do so feel akin to committing a sin.
However, it's important to remember that things may have changed since you signed the credit card or loan contract. You may have experienced a job loss, had a health problem that resulted in a lot of medical debt, or your cost of living increased significantly, leaving you with little money to repay your debts.
Even if you incurred a lot of debt because of mismanagement, it's likely more due to poor money management skills than any type of moral failing. Managing financial resources is a skill and not everyone receives that kind of training. Filing bankruptcy can help you start over. Since you are required to undergo credit counseling, you'll learn what you need to know to avoid getting to this point again.
Businesses Typically Write Off Their Losses
One secret that many debtors aren't aware of is that companies can typically write bad debt off their taxes as a business expense. Banks and other financial companies may make you feel like you're destroying their businesses by not repaying the debt. The reality is, unpaid debt is something most companies plan for and take steps to mitigate.
That's not to say you should ignore the consequences that can arise from unpaid debt. For instance, companies typically increase their prices to cover for customers who don't pay. At the same time, the companies you list on your bankruptcy papers generally won't be worse off because you are unable to follow through pay the account as agreed. Additionally, you can always pay off the debt at any time after your bankruptcy discharge if you feel the need to do so.
For more information about filing bankruptcy or help filing your paperwork, contact a bankruptcy attorney.Share
13 September 2017
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